Crashed

Incredible

Tooze is an incredibly eloquent writer. This book is an extensive of overview of the output as well as the outcome of the financial crisis. Highly enjoyable & an impressive narrative. Simon Vance was brilliant choice for a narrator (as always).

7 of 7 people found this review helpful

A vaccine against substance free deceivers

This is not an easy book to follow but it is a necessary one in order to avoid being misled by bloviators of substance free self appointed spewers of financial misinformation. It deals intelligently with an incredibly complicated set of worldwide connections (financial, geo-political and sociological) and delves into one of the defining moments of our time period, the financial crisis and its aftermath.

If one reads a book about WW II, one should know the date September 1, 1939 as the date when it started and that way the narrative of the story telling never gets away from the reading of the book. Similarly, if one wants to understand our present times one must know the date September 15, 2008, the day that the ATMs almost did not deliver $20 bills and the day that the commercial paper almost ‘broke the buck’ if the government had not intervened. The day the world’s financial system almost collapsed. This book tells that day’s story, what led up to it and what happened after.

There’s a movie and a book that are cited by the author, ‘The Big Short’. They captured the craziness that led to the ‘great recession’. This book, ‘Crashed’, fills in the details and the aftermath and explains in a detailed and erudite fashion (unfortunately, this book does read complexly and I would even venture to say that the person who wrote the review on this book in the New York Times was not able to fully understand this book, but he definitely understood enough of why this book is important and relayed enough such that I knew I wanted to read this book. Even if a reader doesn’t know the difference between a ‘swap and a ‘repo’ or ‘reverse repo’ a reader will get the gist of the book).

The author explains the world before September 15, 2008 and what led to it, then highlights the FED and what America did right, and then looks at the pre and post 2011 period and the self inflicted chaos that Europe and Asia foisted on themselves when they wrongly dealt with the systemic problem inherent in the financial system. The world and its parts are globally connected and made of many moving parts. NATO matters and Putin was an authoritarian thrower of monkey wrenches even in those days and wanted to create chaos mainly against America and in order to try to expand his hegemony at any cost even if it meant unilaterally selling MBSs in order to hurt America just for its own sake, and China did smart things and then did stupid things.

Confidence fairies (bond vigilantes) and austerity hawks (lovers of misery for others, but never for themselves) riled against all the solutions that worked and mindlessly echoed empty slogans such as ‘don’t debase the dollar’ and ‘runaway inflation is the real threat’ and ‘balance the budget to restore prosperity’ in their substance fact free universe while preaching against every single reasonable action while being wrong about everything. The author does specifically quote from Fox News, Brietbart News and Steve Bannon, Glenn Beck and Niall Ferguson (sp?) as gloom and doom substance free and fact free mongers who had nothing but fear and feelings as their guidepost as they spouted those empty slogans. That kind of substance free critic never gets proved wrong since they have no solutions but only offer substance free criticism void of data or academic rigor. They can never fail. They can only be failed by imaginary others, and they never let facts get in the way of the false version of reality they create, because in the end they need FUD (fear, uncertainty and doubt) in order to maintain ignorance so they can ultimately keep people afraid and try to convince you to hate the same people they hate. This book is an antidote to that stupidity.

A major theme of the book is that blame for the crisis was put on ‘politicians, workers and welfare recipients’ and not on the real culprits ‘bankers and financial institutions’. As stated in this book, at the start of the crisis Fox News and other right wing outlets blamed the Community Reinvestment Act (CRA) for the crisis for allowing minorities to have subpar loans thus in their twisted world view causing the complete melt down of the housing market. This book will provide data, facts, and a narrative shooting down such irresponsible statements. The bankers and the financial institutions (with the assistance of the rating agencies) almost destroyed the financial stability of the world and their enablers in the media put the blame on politicians and regulators, workers and welfare recipients (remember, they used to say 47% of Americans don’t pay taxes as if that was the cause of the rich bankers and financial institutions stealing and purposely creating a financial bubble. The only honest thing Greenspan ever said was ‘I’m shocked, I can’t believe it. The bankers lied to me’).

We live in a complex world within a web of interlocking connections. Simpletons love to get on TV and spout their idle chatter on subjects that they know nothing about all the while thinking that the more they talk about the subject means the more they know, when in reality it’s the converse, the more they talk the less informed they are.

Reality is complex, and the financial world and its interactions are not easily comprehended. The hateful want us to remain ignorant of the connections and it is easy for them to shout ‘fake news’ and spout substance free idle chatter on my TV in order to control us through fear. The truth is out there but it sometimes takes effort to find it and understand it.

It’s not easy to understand what happened. It is easy to be misled. A book like this one goes a long way towards immunizing us from the virus of substance free deceivers.

32 of 38 people found this review helpful

Profound & mind-expanding economics tour de force

Buckle your seat belt and open your mind~ Tooze explores a panoply of the social, political and economic dimensions of contemporary and historic economic crises. I found many of my foundational perspectives and worldviews both expanded and challenged, and was astounded by Tooze's ability to effectively communicate multiple perspectives on key emerging events along the timeline of multiple-interrelated economic crises around the world. In an age of rapidly evolving globalism, he rightly, I believe, conveys the urgency of vigorous exploration of these interrelations in our efforts to understand and steer our economic and political institutions and policies. ~A fascinating and deeply enriching exploration~

3 of 3 people found this review helpful

We haven't made it out of the financial crisis yet

"Crashed" is a global economic history spanning the past decade of rolling financial crises—moving from the subprime mortgage crisis in the US, to the Eurozone crisis, to the Chinese stock market turbulence of 2015.

Some of my key takeaways:

THE US SUBPRIME CRISIS WAS FUELED BY EUROPEAN CAPITAL

Although the real-estate development underlying the derivatives that fueled the 2008 financial crisis had their center of gravity in the US, it was European investment capital that fueled supercharged the bubble. Europe still has significantly more financial capital than the United States, and this results in massive investment in US equities.

DON'T EXPECT GLOBAL LEADERSHIP FROM EUROPE

The term "Eurozone" is misleading, as it implies some kind of coherent whole, maybe like the United States of America. Eurozone countries have open borders to member nations, and a share currency.

Greek represents roughly 1.5% of Eurozone GDP (pocket change) and the fact that other member countries were unwilling to either buy Greek bonds or write off Greek debt illustrates that Europe is close to a set of warring nations than allies.

Whereas the Federal Reserve in the US has a dual role, of have an inflation target and keeping unemployment low, the European Central Bank cares solely about currency value. The fact that Spain has 40% unemployment illustrates that the ECB is willing to drive member nations into the ground.

CHINA HAD A CRASH IN 2015

Maybe you didn't hear about it, but China recently had a 50% devaluation in stocks. As China steps up to take the role of dominant global economic powerhouse, it will be further integrated into the global economy. More integration means more liquidity, and more volatility.

In conclusion, "Crashed" drives home the idea that we haven't actually made it to the other side of the financial crises that began a decade ago, and that we, if anything, might actually be more ill-equipped to deal with the next crisis (which could be just around the corner). If you're interested in current global economic affairs, this is a great book for you.

2 of 2 people found this review helpful

So long

It was good. But, it could have been so much shorter. It was not helped by the best pieces being in the front of the book.

1 of 1 people found this review helpful

Excellent history of the financial crisis

Fabulous history of the financial crisis and its contribution to the modern political crisis in the US and elsewhere. Great narration.

1 of 1 people found this review helpful

jargony

"ABCPs .. off balance sheet SIV exposure, holding 2/3 of the commercial paper issued...."

"London as the hub for the over the counter OTC interest rates derivatives business, a means of betting against the risk of interest rate fluctuations and an essential component to repo deals."

If any of that makes sense to you then Tooze is your man. If, on the other hand, you are expecting this book to avoid financial baffle gab and make some sense of the world economic order, then ... not so much.

6 of 10 people found this review helpful

authors politics negatively impacted the content <br />

author suffers a bit of Trump derangement syndrome.
past events are looked via partizan prism

6 of 11 people found this review helpful

An indispensable read

I would have preferred that the reading relied less on acronyms, but I feel vastly enlightened by this terrifying book.

With a little finance review, a great intro

I had to go through the Khan academy review of currency trading before reading this, but it was so worth the time. The best source of total perspective on twenty first century history I've read so far. in addition, the reading is excellent; vance had to use names from all over the world, all over banking and economics, end from at least ten languages and he didn't miss a beat.